Korean investors favor automotive chip stocks over luxury stocks in France

[Photo by Lee Chung-woo]

South Korean individual investors investing in foreign stocks preferred automotive chip stocks the most in the French market over the past year, data showed Thursday.

According to an analysis by Samsung Securities Co. Thursday on the top stocks net purchased by its customers in Euronext Paris, a Paris-based stock exchange, automotive chip company STMicroelectronics Inc. was the most favored stock.

Samsung Securities is the only major brokerage house that provides online trade service of French stocks to Korean retail investors.

Koreans net purchased 886.7 million won ($672,785) worth of STMicroelectronics shares between April 2022 and April 2023, data showed.

The net purchase ranking was followed by Christian Dior SE at 482.78 million won, French luxury fashion group Kering SA, the parent company of Gucci Ltd., at 415.94 million won, HSBC EURO STOXX 50 UCITS ETF that tracks the Euro Stoxx 50 index at 283.69 million won, and Leverage Shares 3x Tesla ETP that tracks 3 times the daily return of Tesla Inc. stock at 161.45 million won.

STMicroelectronics is not well known among consumers in Korea but it is familiar among electric vehicles (EV) investors. It provides chips for vehicles and is headquartered in Switzerland.

Although not among the top net purchase list, LVMH Moët Hennessy Louis Vuitton SE (LVMH), the world’s largest luxury group, is still the leading stock in France.

LVMH owns a large number of famous luxury brands such as Louis Vuitton, Dior, Fendi, Celine, Tiffany & Co, and Bulgari.

Korean investors of foreign stocks, however, have net sold a massive amount of LVMH shares in the past year. The sell-off continued for nine straight months from June last year. Net sales amounted to 15.5 billion won between April 2022 and last month.

In January alone, Korean investors offloaded 2.9 billion won worth of the shares. LVMH stock, in the meantime, rose 17 percent in one month to 800 euros from 680 euros.

The stock’s market cap has also exceeded $500 billion for the first time as a European company last month on the back of strong sales in China and the strong euro. The gain has made LVMH Chairman Bernard Arnault to become the world’s richest individual after overtaking Tesla CEO Elon Musk.

Retail investors also net sold 17.6 billion won worth of shares in Hermes, one of the top three luxury brands with Louis Vuitton and Chanel.

“We don’t exactly know why our customers sold the stocks, but online trading allows them to sell at any time they want,” said an unnamed official from Samsung Securities Co. “They may be selling to realize profits when shares rise.”